Investment Rating - The report maintains a rating of "Buy" for Rongchang Biopharmaceuticals [2][4]. Core Views - The company achieved a revenue of 470 million RMB in Q3 2024, representing a year-on-year growth of 34.6%, with a net loss of 290 million RMB, which is a reduction of 40 million RMB compared to the previous year [3][4]. - The gross margin improved to 82.1%, an increase of 5.8 percentage points, due to enhanced product processes and increased sales scale [4]. - The company is focusing on late-stage pipelines and controlling R&D expenses, with an R&D expense ratio of 74.3%, down by 17.2 percentage points [4]. - Revenue forecasts for 2024-2026 are maintained at 1.647 billion, 2.504 billion, and 3.319 billion RMB respectively [4]. Financial Summary - Revenue for 2022A was not provided, but for 2023A it is projected at 1,083 million RMB, with a significant increase to 1,647 million RMB in 2024E, and further growth to 2,504 million RMB in 2025E and 3,319 million RMB in 2026E [1]. - The net profit figures indicate a loss of 999 million RMB in 2024E, with losses decreasing to 856 million RMB in 2025E and 299 million RMB in 2026E [1]. - The PE ratio is projected to improve from -28.33 in 2024E to -6.68 in 2026E, while the PB ratio is expected to rise from 5.82 in 2024E to 11.81 in 2026E [1].

Investment Rating - The report maintains a "Buy" rating for Rongchang Biopharma (9995 HK) with a target price of HKD 24.00, indicating a potential upside of 45.6% from the current price of HKD 16.48 [1][3][5]. Core Insights - The company's 3Q24 core product sales continue to grow, with significant progress in overseas clinical registrations. The financial forecast for 2024 has been adjusted upwards based on better-than-expected performance in 3Q24 [1][3]. - The report highlights that the sales of the core products, Taitasip and Vidisizumab, are expected to expand further in the domestic market and continue steady progress in overseas clinical trials [1][3]. - The company has sufficient cash reserves of approximately RMB 1.12 billion and a credit line of RMB 2.8 billion to support its operations without needing to secure business development (BD) transactions in the near term [1][2]. Financial Performance Summary - In 3Q24, Rongchang Biopharma reported a revenue of RMB 470 million, a year-on-year increase of 34.6%. The sales of Taitasip reached RMB 270 million, up 43% year-on-year, while Vidisizumab sales were around RMB 200 million, up 25% year-on-year [2][3]. - The net loss for 3Q24 was RMB 290 million, a significant reduction from RMB 430 million in 2Q24. The gross margin improved to 82.1%, an increase of 5.8 percentage points year-on-year [2][3]. - The report projects a 6% increase in the 2024 revenue forecast to RMB 1.74 billion, with Taitasip and Vidisizumab expected to generate sales of RMB 960 million and RMB 760 million, respectively [3][4]. Future Outlook - Key upcoming milestones include the initiation of the second phase of the overseas SLE III trial for Taitasip in 4Q24, with data readout expected in 1H25. The report also notes ongoing registration and critical clinical trials for various indications in China [3][4]. - The report emphasizes the importance of monitoring the registration progress of Vidisizumab for breast cancer and the timeline for overseas submissions based on the progress of the first-line UC III trial [3][4].

Investment Rating - The report maintains a "BUY" rating for RemeGen, indicating a potential return of over 15% over the next 12 months [12]. Core Insights - RemeGen achieved record product sales in Q3 2024, with revenue of RMB467 million, reflecting a 14% quarter-over-quarter and 35% year-over-year increase, driven by strong sales of RC18 and RC48 [1]. - The company narrowed its net loss to RMB291 million in Q3 2024 from RMB432 million in Q2 2024, indicating improved financial performance [1]. - The gross profit margin improved to 82.1% in Q3 2024, up from 78.3% in the first half of 2024, while the SG&A expense ratio decreased to 68.5% [1]. - RemeGen's total revenue for the first nine months of 2024 reached RMB1,209 million, representing a 57% year-over-year growth and aligning with expectations [1]. - The report anticipates continued strong sales momentum into Q4 2024 and beyond, supporting the company's FY24 sales target of over 50% year-over-year growth [1]. Financial Summary - Revenue projections for FY24 are estimated at RMB1,740 million, with a year-over-year growth of 61.7% [2]. - The net profit for FY24 is projected to be a loss of RMB1,268 million, improving to a loss of RMB967 million in FY25 and further narrowing to RMB275 million in FY26 [2]. - R&D expenses are expected to be RMB1,450 million for FY24, remaining stable in FY25, and slightly increasing to RMB1,502 million in FY26 [2]. - The gross profit margin is projected to be 80.31% for FY24, improving to 81.15% in FY25 and 80.81% in FY26 [7]. Valuation - The report revises the DCF-based target price from HK$19.59 to HK$21.09, reflecting a 28% upside from the current price of HK$16.48 [3][4]. - The DCF per share is calculated at HK$21.09, based on a WACC of 12.93% and a terminal growth rate of 2.0% [4][5]. - The market capitalization of RemeGen is approximately HK$8,970.6 million, with an average three-month turnover of HK$42.5 million [3].

Revenue and Profitability - Revenue for Q3 2024 reached ¥467,117,500.34, representing a year-on-year increase of 34.60%[3] - Net profit attributable to shareholders was -¥290,966,871.21, with a cumulative net profit of -¥1,071,426,638.90 year-to-date[3] - Total operating revenue for the first three quarters of 2024 reached ¥1,208,874,280.23, a significant increase from ¥769,470,314.65 in the same period of 2023, representing a growth of approximately 56.9%[16] - Net profit for the third quarter of 2024 was a loss of ¥1,071,426,638.90, slightly worse than the loss of ¥1,030,585,859.60 in the same quarter of 2023[19] - The company reported a basic and diluted earnings per share of ¥-1.99 for the third quarter of 2024, compared to ¥-1.91 in the same quarter of 2023[19] Research and Development - Research and development expenses totaled ¥347,174,784.03, accounting for 74.32% of revenue, a decrease of 17.17 percentage points compared to the previous year[4] - Research and development expenses for the first three quarters of 2024 amounted to ¥1,153,407,440.34, up from ¥857,977,852.40 in 2023, reflecting a growth of approximately 34.4%[18] - The company experienced a decline in equity attributable to shareholders, down 31.09% due to increased losses from R&D investments[7] - Future outlook includes continued focus on research and development of new products and technologies to drive growth[12] Assets and Liabilities - Total assets at the end of the reporting period were ¥5,712,713,413.00, an increase of 3.34% from the previous year[4] - The company's current assets totaled RMB 2,524,007,322.36, up from RMB 2,228,931,955.16 at the end of 2023, indicating a growth of approximately 13.2%[13] - Total liabilities as of the end of the third quarter of 2024 were ¥3,344,032,874.19, compared to ¥2,090,972,550.70 in 2023, showing an increase of about 60.0%[18] - The total equity attributable to shareholders of the parent company was ¥2,368,680,538.81, down from ¥3,437,268,153.89 in the previous year, indicating a decrease of approximately 30.9%[18] Cash Flow - Cash flow from operating activities was not applicable for the current period, with a cumulative negative cash flow of -¥835,103,066.88 year-to-date[3] - Cash inflow from operating activities totaled ¥1,222,172,614.37 for the first three quarters of 2024, compared to ¥718,145,797.69 in 2023, marking an increase of about 70.0%[20] - Cash flow from operating activities for the first three quarters of 2024 was negative at ¥-835,103,066.88, an improvement compared to ¥-1,114,762,180.68 in the same period of 2023[20] - Net cash flow from investment activities was -¥425.81 million, an improvement from -¥920.37 million year-over-year[21] - Total cash inflow from financing activities reached ¥1,316.63 million, up from ¥659.28 million, representing a 99.5% increase[21] - Net cash flow from financing activities was ¥1,202.06 million, compared to ¥511.63 million in the previous period, showing a significant increase of 134%[21] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 7,618[8] - The company reported a total of 7,594 A-share common stockholders and 24 H-share common stockholders as of the report date[11] - The top 10 shareholders held a total of 189,566,728 shares, representing 34.83% of the total shares outstanding[9] Market Position and Strategy - The company reported a significant increase in sales of injectable drugs, specifically TaiTasi and VidiXimab, contributing to revenue growth[7] - The company has engaged in strategic partnerships and investments to enhance its market position and expand its product offerings[12] Government Support - Government subsidies recognized in the current period amounted to ¥17,816,478.70, impacting the overall financial performance positively[5]

Financial Performance - The company's operating revenue for Q3 2024 was ¥467,117,500.34, representing a year-on-year increase of 34.60%[2] - The net profit attributable to shareholders was -¥290,966,871.21, with a year-to-date net profit of -¥1,071,426,638.90[2] - Total operating revenue for the first three quarters of 2024 reached ¥1,208,874,280.23, a significant increase from ¥769,470,314.65 in the same period of 2023, representing a growth of approximately 56.9%[14] - The net loss for the first three quarters of 2024 was ¥1,071,426,638.90, compared to a net loss of ¥1,030,585,859.60 in the same period of 2023, showing a slight increase in losses[16] - The basic and diluted earnings per share were both -¥0.54 for Q3 2024, with a year-to-date figure of -¥1.99[3] - The basic and diluted earnings per share for the first three quarters of 2024 were both -¥1.99, compared to -¥1.91 in 2023, indicating a slight deterioration in per-share performance[17] Research and Development - Research and development expenses totaled ¥347,174,784.03 in Q3 2024, accounting for 74.32% of operating revenue, a decrease of 17.17 percentage points compared to the same period last year[3] - Research and development expenses surged to ¥1,153,407,440.34 in the first three quarters of 2024, compared to ¥857,977,852.40 in 2023, reflecting a rise of approximately 34.4%[14] - The total equity attributable to shareholders decreased by 31.09% year-on-year, primarily due to increased losses from higher R&D expenditures[6] Assets and Liabilities - The total assets at the end of the reporting period were ¥5,712,713,413.00, an increase of 3.34% from the end of the previous year[3] - The total liabilities increased to ¥3,344,032,874.19 in 2024 from ¥2,090,972,550.70 in 2023, marking an increase of approximately 60.0%[13] - The total equity attributable to shareholders decreased to ¥2,368,680,538.81 in 2024 from ¥3,437,268,153.89 in 2023, a decline of about 30.9%[13] Cash Flow - The cash flow from operating activities was not applicable for the current period, with a year-to-date net cash flow of -¥835,103,066.88[2] - In the first three quarters of 2024, the company generated cash inflows from operating activities totaling approximately ¥1.22 billion, compared to ¥718.15 million in the same period of 2023, representing a year-over-year increase of 70%[18] - The net cash flow from operating activities for the first three quarters of 2024 was approximately -¥835.10 million, an improvement from -¥1.11 billion in the same period of 2023[18] - The total cash outflow from operating activities was approximately ¥2.06 billion in 2024, compared to ¥1.83 billion in 2023, indicating an increase of about 12%[18] Shareholder Information - The company reported a total of 7,618 shareholders, with 7,594 being A-share holders and 24 being H-share holders[9] - The top 10 shareholders include HKSCC NOMINEES LIMITED holding 189,566,728 shares, representing 34.83% of total shares[9] Government Support - The company received government subsidies amounting to ¥17,816,478.70 during the reporting period, contributing to its other income[4] Interest and Other Income - The company reported a significant increase in interest expenses, which rose to ¥55,598,761.08 in 2024 from ¥13,656,827.51 in 2023[16] - Other comprehensive income after tax for the first three quarters of 2024 was negative at -¥42,366,321.69, compared to -¥7,908,770.97 in 2023, indicating a worsening position[17] Product Development - The company reported a significant increase in sales revenue due to higher sales volumes of its injectable products, specifically TaiTasi and VidiXimab[6] - The company is actively involved in the development of new products and technologies, focusing on market expansion strategies[10]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 739.66 million, a significant increase of 76.5% compared to RMB 419.07 million for the same period in 2023[6]. - Gross profit for the first half of 2024 was RMB 570.39 million, up from RMB 316.42 million in the same period last year, reflecting a gross margin improvement[6]. - The company reported a pre-tax loss of RMB 780.46 million for the first half of 2024, compared to a pre-tax loss of RMB 703.36 million in the same period of 2023[6]. - The company reported a net loss of RMB 780.5 million for the six months ended June 30, 2024, compared to a net loss of RMB 703.4 million for the same period in 2023[43]. - The total comprehensive loss for the period was RMB 806,453 thousand, compared to RMB 709,024 thousand in the same period of 2023[153]. - The basic loss per share for the period was calculated based on a weighted average number of shares of 537,631,657, slightly down from 539,347,672 in the previous year[178]. Assets and Liabilities - Total assets as of June 30, 2024, reached RMB 5,754.54 million, an increase from RMB 5,528.24 million as of December 31, 2023[6]. - Total liabilities as of June 30, 2024, were RMB 3,089.93 million, compared to RMB 2,090.97 million as of December 31, 2023, indicating increased leverage[6]. - Total equity decreased to RMB 2,664.61 million as of June 30, 2024, from RMB 3,437.27 million as of December 31, 2023[6]. - The debt-to-asset ratio increased to 53.7% as of June 30, 2024, compared to 37.8% as of December 31, 2023[45]. - Cash and cash equivalents decreased to RMB 673,322 thousand from RMB 726,552 thousand, indicating a reduction in liquidity[155]. Research and Development - Research and development expenses increased to RMB 806.23 million in the first half of 2024, compared to RMB 540.45 million in the same period of 2023, indicating a focus on innovation[6]. - The company has a robust pipeline with over ten drug candidates, seven of which are in clinical development targeting more than twenty indications[7]. - The company is exploring Taitasip's potential for treating other autoimmune diseases, including antiphospholipid syndrome and thrombocytopenia[14]. - The company has received breakthrough therapy designation for Taitasip in gMG from the FDA in the U.S.[13]. Clinical Trials and Approvals - Taitasip (RC18) received full NMPA approval for systemic lupus erythematosus (SLE) in China in November 2023, with successful inclusion in the national medical insurance catalog by the end of 2023[11]. - A Phase III clinical trial for Taitasip in rheumatoid arthritis (RA) yielded positive results in Q2 2023, with a BLA submitted to NMPA in August 2023 and approval expected in July 2024[12]. - The company initiated a Phase III clinical trial for generalized myasthenia gravis (gMG) in China in H1 2023, with primary endpoints expected to be met by August 2024[13]. - The global Phase III trial for SLE is ongoing, addressing significant unmet medical needs[11]. Market Presence and Products - RemeGen has commercialized two products, RC18 (brand name: Tai'ai®) and RC48 (brand name: Aidiqi®), which are undergoing clinical trials in China and the United States[7]. - The company aims to become a leading player in the global biopharmaceutical industry by addressing unmet medical needs in autoimmune, oncology, and ophthalmology diseases[7]. - The company is actively expanding its market presence for TaiTasi and Vidisizumab in China while accelerating the clinical trial processes for pipeline products[33]. Shareholder Structure and Incentives - As of June 30, 2024, the total number of shares outstanding is 544,332,083, comprising 354,750,844 A shares and 189,581,239 H shares[59]. - The company has established partnerships with several limited partnerships for employee incentive plans, holding a total of 102,381,891 A shares among them[59]. - The company has implemented a restricted stock incentive plan for its executives, which includes performance-based conditions[60]. - Major shareholders include RongChang Holding Group LTD. with 53.25% of A shares and 11.47% of H shares, and Wang Xudong holding 54.41% of A shares and 13.31% of H shares[63][64]. Financial Management and Cash Flow - The net cash used in operating activities was RMB 826.3 million for the six months ended June 30, 2024, with cash and cash equivalents decreasing from RMB 726.6 million as of December 31, 2023, to RMB 673.3 million as of June 30, 2024[44]. - The company reported a decrease in cash and cash equivalents of RMB (55,065) thousand for the first half of 2024, compared to a decrease of RMB (968,393) thousand in the same period of 2023[160]. - The net cash flow from financing activities for the first half of 2024 was RMB 1,099,497 thousand, a significant increase from RMB 481,741 thousand in the same period of 2023[160]. Corporate Governance - The company has complied with all applicable corporate governance codes during the reporting period[141]. - The independent auditor, Ernst & Young, reviewed the interim financial information for the six months ending June 30, 2024[143]. - The company has adopted a standard code for securities trading by directors and supervisors, confirming compliance during the reporting period[142].

本公司董事会及全体董事保证本公告内容不存在任何虚假记载、误导性陈述 或者重大遗漏，并对其内容的真实性、准确性和完整性承担法律责任。 重要内容提示： 投资者可于 2024 年 9 月 13 日（星期五）16:00 前通过荣昌生物制药（烟 台）股份有限公司（以下简称"公司"）邮箱 rcsw@remegen.com 进行提问。公司 将在说明会上对投资者普遍关注的问题进行回答。 公司已于 2024 年 8 月 17 日发布公司 2024 年半年度报告，为便于广大投资 者更全面深入地了解公司 2024 年半年度经营成果、财务状况，公司参与了由上 海证券交易所主办的 2024 年半年度科创板制药及生物制品专场集体业绩说明会， 此次活动将采用网络文字互动的方式举行，投资者可登录上海证券交易所上证路 演中心（http://roadshow.sseinfo.com/）参与线上互动交流。 一、 说明会类型 本次投资者说明会以网络文字互动形式召开，公司将针对 2024 年半年度的 经营成果及财务指标的具体情况与投资者进行互动交流和沟通，在信息披露允 许的范围内就投资者普遍关注的问题进行回答。 | 证券代码：688331 | 证券简 ...

Investment Rating - The report maintains an "Accumulate" rating for Rongchang Biologics [4][5]. Core Views - The company achieved a revenue of 742 million RMB in H1 2024, representing a year-on-year growth of 75.6%. However, the net profit attributable to shareholders was a loss of 780 million RMB, which increased by 77 million RMB compared to the previous year. The cash and cash equivalents stood at 673 million RMB [5]. - In Q2 2024, the company recorded a revenue of 411 million RMB, up 61.8% year-on-year, with a net profit loss of 432 million RMB, which also increased by 52 million RMB year-on-year. The losses were attributed to multiple pipelines entering Phase III and a significant increase in R&D expenses [5]. - The revenue forecasts for 2024-2026 are maintained at 1.647 billion RMB, 2.504 billion RMB, and 3.319 billion RMB, respectively [5]. Summary by Sections Commercialization and Clinical Progress - The commercialization of Taitasip is accelerating domestically, and the overseas SLE indication is progressing smoothly. The company has established a self-immune sales team of over 800 people and has completed access to over 900 hospitals. With improved operational efficiency and the gradual recovery of hospital access, per capita output is expected to increase, driving continuous growth in performance [5]. - Multiple indications are progressing well: - RA indication was approved in July 2024. - MG domestic Phase III reached the primary clinical endpoint in August, with an NDA submission expected by the end of 2024. - PSS and IgA domestic Phase III trials have completed enrollment. - The overseas SLE Phase III trial has completed the first patient enrollment. - The overseas MG Phase III trial has also completed the first patient enrollment and received FDA's Fast Track Designation [5]. RC48 Development - The RC48 treatment for 1L UC has completed enrollment in Phase III domestically, with ongoing clinical trials overseas. The company has a tumor sales team of over 600 people and has completed access to over 700 hospitals. - RC48+PD1 for 1L UC has completed Phase III enrollment. - According to Pfizer's oncology developer day materials, RC48 monotherapy for 2L UC in the U.S. is in Phase II, with data readout expected in H1 2025. - RC48+PD1 for 1L gastric cancer has shown excellent Phase II IIT data, with Phase III still enrolling. - RC48+PD1 is being advanced for perioperative use and treatment of 2L GC domestically. - RC48 monotherapy for HER2-positive BC with liver metastasis has achieved the primary clinical endpoint in Phase III, with NDA submission expected soon [5]. Catalysts - Potential catalysts include product volume exceeding expectations, innovative drug clinical data surpassing expectations, and financing progress exceeding expectations [5].

Financial Performance - RemeGen Co., Ltd. reported a total revenue of RMB 3.62 billion for the year 2023, representing a year-over-year increase of 25%[1]. - The company reported a total revenue of 990,282 million RMB for the year 2023, with a slight increase from 857,240 million RMB in the previous year, indicating a growth of approximately 15.5%[4]. - The company has set a future revenue guidance of 1,048 million RMB for the upcoming quarter, which represents a projected growth of 5.5% compared to the previous quarter[4]. - RemeGen aims to achieve a revenue growth target of 30% for the upcoming fiscal year, driven by new product launches and market expansion strategies[1]. Research and Development - The company has allocated significant resources towards R&D, with an increase of 15% in R&D expenditure compared to the previous year[1]. - The company is investing in new technology development, with a budget allocation of 44.30 million RMB for R&D in the next fiscal year[4]. Market Expansion and Strategy - The company plans to expand its market presence and is focusing on new product development, particularly in the biopharmaceutical sector[1]. - Market expansion strategies include targeting new geographical regions, aiming for a 20% increase in market share by 2025[4]. - RemeGen is exploring potential mergers and acquisitions to enhance its product portfolio and market reach[1]. - The company is considering potential mergers and acquisitions to enhance its competitive position, with a focus on companies that align with its strategic goals[4]. Customer Engagement and Retention - The company plans to implement a new customer loyalty program, projected to increase customer retention rates by 15%[4]. - The executive team emphasized the importance of adapting to market trends, with a focus on digital transformation to improve customer engagement[4]. - The company reported a user base growth of 20% in its key therapeutic areas, indicating strong market demand for its products[1]. - The user data showed a significant increase, with 345,907 active users reported, compared to 352,202 in the previous period, reflecting a retention challenge[4]. Incentive Plans and Share Grants - The company has granted a total of 850,000 shares under the H-share incentive plan, with a weighted average price of HKD 27.06 per share[2]. - The company granted a total of 2,321,350 shares under the 2022 A-share incentive plan, with a weighted average fair value of RMB 36.36 per share[7]. - The total number of shares granted to the five highest-paid individuals, excluding three executive directors, is 24,200 shares[7]. - The company reported that 79,450 shares were granted to a key executive with a fair value of RMB 49.77 per share[8]. - The shares granted to employees under the incentive plan include 1,253,000 shares with a fair value of RMB 49.77 per share[8]. - The company aims to achieve performance targets based on both group-level and individual-level assessments for the incentive plan[9]. - The incentive plan includes a vesting period from December 28, 2023, to December 28, 2029, for certain granted shares[8]. - The total number of shares that have been granted and vested during the reporting period is 690,000 shares[7]. Performance Assessment - The performance assessment targets for the incentive plan include total revenue (excluding overseas licensing income) and the number of new clinical trials initiated, evaluated annually from 2022 to 2026[9]. - The performance assessment for the 2023 A-share incentive plan includes revenue targets excluding overseas licensing income from Taitasip and the total number of new clinical trials initiated, evaluated annually from 2024 to 2027[10]. - The company has outlined specific performance criteria that must be met for the vesting of restricted shares, including revenue growth and clinical trial initiation[9]. Sustainability and Compliance - The company is committed to maintaining a sustainable growth trajectory while ensuring compliance with regulatory standards in its operations[1]. - The management highlighted a commitment to sustainability initiatives, which are expected to reduce operational costs by 10% over the next three years[4]. Governance - The board of directors includes both executive and non-executive members, ensuring diverse oversight and governance[11].

19 Aug 2024 CMB International Global Markets | Equity Research | Company Update RemeGen (9995 HK) Strong sales performance in 2Q In 2Q24, RemeGen recorded strong product sales, with revenue reaching RMB411mn (+77% YoY), mainly from the product sales of RC18 and RC48, compared to RMB330mn in 1Q24 (+24% QoQ) and RMB254mn in 2Q23 (+62% YoY). The total product sales were RMB729mn in 1H24 (+75% YoY), representing approximately 47% of our previous FY24 estimate, largely in line with our expectations. We are reass ...